Germany, birthplace of the automobile, just gave the green light to robotaxis

May 28, 2021, 2:25 PM UTC

Germany is set to become the world’s first major economy to legalize the commercial use of fully autonomous “robotaxis,” beating out the United States and China.

With only weeks left in Angela Merkel’s chancellorship, parliament’s upper chamber followed its colleagues in the lower house in greenlighting her government’s landmark bill on Friday with a clear majority.  

Minutes before, one parliamentarian likened the moment to the historic drive of Bertha Benz in 1888 that launched the modern era of the automobile, and later gave birth to Mercedes-Benz. 

“Today we’re on our way from the horse-less carriage to the driverless car,” said Winfried Hermann, state transport minister for Baden-Württemberg, speaking before the upper house. “It’s indeed impressive Germany is the first that dares to set rules in this field.”

Currently only Alphabet subsidiary Waymo has a robotaxi fleet in service in Phoenix. While self-driving vehicles can be spotted in German cities like Hamburg, they first require special permission—and they typically still have safety drivers and none are for commercial use.

Not your typical passenger car

The vehicles foreseen in Germany’s legislation can be likened to shuttles more than traditional passenger cars. Due to the amount of sensors and computing power technology equipped, they would be far too expensive for the average customer. Under the law, a technical command center would be tasked with overseeing the fleet remotely should any trouble ensue. 

Experts say this bill, which will likely take effect in a matter of weeks once formalities are over, is one of the rare examples where regulation leads, rather than lags, technology. 

“This law has been part of the coalition government’s legislative agenda since the very beginning, so it doesn’t want to expose itself to any criticism that it didn’t do its job,” said Kai-Uwe Opper, solicitor with the Mock law firm in Berlin, speaking to Fortune

Opper represents Teraki GmbH, a Berlin-based autonomous driving software firm founded in 2015 that employs some 50 people. It hopes to win approval next year to launch a robotaxi service—not for ferrying passengers, but cargo, such as food deliveries. 

A key aspect for his client is the technical regulations from the federal transport ministry that will come later and build specifications around the legislation.

Given the concerns around safety, Germany’s ADAC motoring club, Europe’s largest with 21 million members, wants to see a proviso in the specifications that allow for revoking permission for vehicles as soon as they don’t fully comply with all requirements. Nevertheless in a statement to Fortune it called today “an important step forward in creating a robust legal framework” for driverless technology.

Big Auto’s route to market

Despite campaigning for the landmark bill, Germany’s powerhouse carmakers themselves have no plans to take advantage of the freedoms the law provides any time soon. 

Mercedes-Benz parent Daimler has made it clear it does not see a convincing business case for operating autonomous vehicle fleets, while BMW doesn’t even have a suitable model to shuttle passengers due to its focus on sporty sedans and crossovers.

Only Volkswagen has voiced plans to launch a commercial robotaxi service. Based on a specially adapted version of its upcoming ID Buzz electric microbus and employing software from U.S. self-driving startup Argo AI, it isn’t scheduled to launch until 2025. 

Germany’s auto industry believes, however, that it could help shape legislation that serves as a blueprint for a law that will eventually supersede it at a European Union level. Thanks to the bloc being a regulatory superpower, the chances are good these standards could then be exported to other jurisdictions around the world.

Nearly stalled out

The bill nearly failed. Had parliament delayed the legislation by even a few weeks more, there was an acute risk it would die unceremoniously in transit. Starting in July, MPs break for summer and only return in time to kick off the campaign season for September’s federal vote. 

“Since all the legislative plans start from scratch in a new government, the current bill as it stands would effectively have been tossed in the garbage bin, said Opper. “So it was very important for the government to push this over the line, otherwise more than a year could be lost.” 

Not only would that have cost time before another attempt could be made, it could look considerably different. That’s because Bavaria’s industry-friendly conservatives that drafted the bill are widely expected to lose control over the transport ministry to the Greens in the next term.

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